The merger proposal of Cairn India and Vedanta Ltd can be put to vote for shareholders approval by January, Tom Albanese, Chief Executive Officer, Vedanta Resources Plc, said on Tuesday.
“We have received approvals from the stock exchanges which is valid for six months from September 10. We are now waiting for approvals from the respective High Courts before moving further,” said Albanese, who is also Chief Executive Officer of Vedanta Ltd.
He added that there is no fresh or changed merger proposal under consideration and that the company is regularly engaging with all shareholders. In June, the two companies announced a merger scheme with a share swap ratio of 1:1 for merging Cairn India into Vedanta Ltd. Cairn India shareholders will also get one preference share in the merged entity for each share they hold.
On Tuesday, Vedanta Ltd’s shares closed 0.14 per cent higher on the BSE at ₹104.85.
Albanese was speaking at the announcement of Vedanta Ltd’s financial results for the second quarter of fiscal 2015-16. The company reported a 41 per cent drop in its consolidated net profit at ₹ 974 crore (₹1,640 crore) as it was hit by low commodity prices.
The company’s net sales fell 16 per cent to ₹16,349 crore from ₹19,448 crore in the same quarter last year. It has declared an interim dividend of ₹3.50 a share.
“We are still in a Chinese soft landing environment. But, I am bullish that commodity prices will bottom out and hopefully improve by the end of this year,” said Albanese.
The company remains focussed on lowering its cost of operations to tackle the low commodity price environment.
Asked whether the low prices will force the company to take an impairment charge on its businesses, Albanese said, “It is important to stay a low cost producer. If we stay in the lower quartile of the cost curve, we can get positive cash flows. That is the priority. If it does not work, then we would need to take a more drastic step.”
Meanwhile, Vedanta Ltd has to repay ₹ 9,769 crore of debt in the second half of the 2015-16 fiscal.
The company’s Chief Financial Officer DD Jalan said, “Out of this ₹ 3,400 crore has already been tied up. We are also in the process of converting our short-term loans into a long term maturity. The interest rates coming down are also helping us in this process.”
As on September 30, 2015, the company had gross debt of ₹ 79,433 crore while its cash and liquid investments are ₹ 52,328 crore.